Personal Insolvency Arrangement

A Personal Insolvency Arrangement (also known as a PIA) is similar to a debt settlement arrangement, however this is used if the financial difficulties are being caused by high mortgage payments and/or payments on loans and credit cards. The arrangements can deal with secured debt (i.e. mortgages) of up to €3,000,000, however this limit can be increased with the agreement of the Creditors.  The arrangements usually have a set duration of six years.           Do I Qualify?

Personal Insolvency Arrangements can only be set-up by using the services of a Personal Insolvency Practitioner (PIP) who is authorised to handle such cases in Ireland.

In order to ease financial difficulties the mortgage lender can agree to one of or a combination of the following to reduce monthly mortgage payments: –

  • Lower interest rate
  • Extension of mortgage term
  • Equity stake in property in return for certain amount written off mortgage balance
  • Interest payments and part capital for arrangement duration
  • Interest only payments for the arrangement duration
  • Deferred payments for arrangement duration
  • Arrears added to existing mortgage balance

The arrangement needs be approved by 65% of your total creditors (50% of both Secured and Unsecured).  Interest or charges are frozen on unsecured liabilities and any potential negative equity written off by the mortgage lender(s).  Following successful completion the unaffordable loan, credit card and mortgage write offs are discharged.

There is a condition which will mean that should you subsequently sell your property in the future there may be a claw back on any written off amounts for the lesser of 20 years or the expiry of the mortgage term.

If the PIA proposal is approved by 65% in value of the creditors (50% of secured and 50% unsecured) then it will be binding on all of the creditors.  If agreement is reached then the ISI is informed and they will then transmit the arrangement to the appropriate Court.

If this is the most appropriate solution we can walk you through the eligibility criteria, the likely process and the effect the arrangement will have as well as any questions you may have.